De Montfort University Real Estate Debt

De Montfort University Real Estate Debt

Despite the uncertainty surrounding the EU referendum vote, new loans in the UK commercial property industry remained steady throughout the year – albeit at lower levels than in 2015 – according to the 2016 Year-End De Montfort Commercial Property Lending Report.

Property lending main

The most comprehensive study of the UK’s commercial property lending market shows that while new lending was down by 17 per cent in 2016, compared to its post-crisis peak in 2015, the vote to leave the EU seems to have had minimal impact on new lending activity.

In a shift from 2015, where 55.6 percent of loans were for new acquisitions, 61% of new lending last year was refinancing for existing loans. The percentage of new loans from UK Banks & Building Societies increased last year.

At year-end 2016, the total value of loan books identified by this research grew a moderate 0.5 per cent to £191.5bn, including both drawn and undrawn amounts, yet total drawn debt declined by 2.1 per cent from year-end 2015 to £164.8bn.

Geographically, the data highlights significant regional disparities with 63 per cent of the total debt secured against property in London and the South East. This compares with 12 per cent for the North, 11 per cent in the Midlands and Wales, and four per cent in Scotland.

Academics at De Montfort University Leicester (DMU) have been compiling the report since 1997, using data submitted by almost 60 lenders such as banks, building societies and insurance companies.